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Build-to-Suit Lease
12 Months Ended
Sep. 30, 2013
Leases [Abstract]  
Build-to-Suit Lease
Build-to-Suit Lease
During the year ended September 30, 2012, we entered into a build-to-suit facility lease agreement and a construction management agreement related to the relocation of our Glendale Heights, Illinois campus to, and the design and construction of a new campus in, Lisle, Illinois. Under build-to-suit lease arrangements, we establish assets and liabilities for the estimated construction costs incurred to the extent we are involved in the construction of structural improvements or take construction risk prior to the lease commencement.
Under these agreements, we retained all construction risk and therefore, for accounting purposes, were considered the owner during the construction period. We have recorded approximately $27.6 million in construction in progress and $27.6 million in the related construction liability on our consolidated balance sheet as of September 30, 2013. The construction management agreement required us to fund any budget overruns related to this construction project. Furthermore, although we were owners during the construction period, we do not own the underlying land. Therefore, we have an imputed operating lease expense related to our use of the land that is recognized from the time we entered into the agreement through the initial lease term and was approximately $0.3 million for the year ended September 30, 2013.
Construction was completed during November 2013 and the facility was placed into service effective December 1, 2013. We have determined that we have continued involvement in the facility after the construction period was completed, which precludes us from achieving sale-leaseback accounting. As such, we did not derecognize the facility or related construction liability upon occupancy and will continue to account for the arrangement as a financing obligation. Accordingly,the asset and a corresponding financing obligation are included in our consolidated balance sheet on December 1, 2013. The asset will be depreciated over the initial lease term of 18 years. The financing obligation will be amortized through the effective interest method in which a portion of the lease payments will be recognized as interest expense, a portion will be allocated to the imputed land lease and the remaining portion will decrease the financing obligation. Future minimum financing payments under this lease as of September 30, 2013 are as follows:
Years ending September 30,

2014
$
2,286

2015
2,852

2016
2,914

2017
2,978

2018
3,044

Thereafter
46,808


$
60,882


Concurrent with the lease agreement, we invested $4.0 million to acquire an equity interest of approximately 28% in a joint venture (JV). In connection with this investment, we do not possess a controlling financial interest as we do not hold a majority of the equity interest, nor do we have the power to make major decisions without approval from the other equity member. Therefore, we do not qualify as the primary beneficiary. Accordingly, this investment is accounted for under the equity method of accounting and is included in other assets in the consolidated balance sheet as of September 30, 2013. We will recognize our proportionate share of the JV’s net income or loss, during each accounting period, as a change in our investment. We will evaluate the investment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To the extent the book value of the investment exceeds its assessed fair value, we will record an appropriate impairment charge. No impairment charge was required during the year ended September 30, 2013.
We have also entered into a related tax increment financing arrangement which provides us with a tax rebate up to $6.2 million with respect to property taxes paid for the Lisle, Illinois campus. The agreement requires specific actions performed by us throughout the term in order for us to continue receiving the tax rebate.